According to a South China Morning Post report, China’s non-fungible token (NFT) business has released a “self-discipline initiative” that guarantees identification checks for users, adherence to the country’s cryptocurrency prohibition, and a promise to not develop secondary marketplaces to counter speculation.
The 14-article document published last week by the China Cultural Industry Association was a private-sector initiative that was not legally enforceable. Many organisations participating in China’s digital collectibles market have joined, including Tencent Holdings, Baidu, JD.com, and Ant Group, Alibaba Group Holding’s finance subsidiary.
Tencent, Ant Group, and Baidu, have launched their digital collectible marketplaces built on private chains that allow purchases with the Chinese yuan only and prohibit secondary trading.
Although the statement makes no mention of reselling NFTs, the effort vows to prevent creating secondary markets for NFT trading and to “firmly resist speculation.”
“Different from most foreign platforms that apply NFT technology as financial products, domestic digital collections are more regarded as the category of digital cultural creativity,”according to the China Cultural Industry Association.
The initiative could mark an important step toward more regulatory clarity. State agencies responsible for developing industry standards may take the proposals into consideration.
Last year, Chinese authorities not only banned crypto transactions, but also forced many Bitcoin mining operators to move overseas.
These regulations, were not extended to the NFT space. China’s state-backed Blockchain Services Network announced in January the creation of its own platform for launching tokenized digital collectibles.
In April, the National Internet Finance Association of China, the China Banking Association, and the Securities Association of China issued guidelines restricting the use of NFTs in the issuance of securities, insurance, and loans, as well as the facilitation of NFT trading and investments by the country’s financial institutions.
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